Adult mesenchymal progenitor cells have enormous potential for use in reparative medicine. The easy access and isolation of bone marrow aspirate or liposuction collection have made these cells a prime target for studies of differentiation into various adult mesenchymal tissues for regenerative purposes. If this source of progenitor cells is to achieve broad clinical utility, the true identity of the progenitors and its progeny need to be more precisely defined and modulation of their commitment needs to be understood. Obstacles to these goals are the inability to identify and purify these cells, and the lack of in vivo markers that can be used to confirm that progenitor cells can attain the state and functionality of terminally differentiated phenotypes. We accept these challenges and propose a hypothesis that will test if pericyte/myofibroblasts have the characteristics of mesenchymal progenitors. We hypothesize that smooth muscle a-actin (SMA) expressing cells are the major source of osteoprogenitors in adult bone tissue. To define a population of myofibroblasts/pericytes we will utilize previously developed transgenic mice in which pericytes are identified by SMA promoter-GFP transgene expression (SMAGFP). The differentiation ability of these cells, will be tested using transgenic mice in which osteoblast, adipocyte or chondrocyte specific promoters drive GFP reporter expression. These transgenes activate at mature stages of the lineage and, by combining complementary colors, we can test for the ability of isolated SMA+ cells to progress from a progenitor to fully mature state. In addition we will complete lineage tracing experiments using regeneration models and new bone formation in vivo. Utilizing an SMA-CreERT2 mouse crossed with a Rosa26(cag-tdTomato) reporter line in models of tissue repair that include fracture healing and induction of osteogenic potential using ectopic bone formation induced by BMP2, we will evaluate the progenitor ability of SMA expressing cells. In the third aim we propose to determine the divergence point of mesenchymal progenitor cell into mature lineages. Based on expression of lineage-directed GFP markers, stage specific populations of mesenchymal progenitors will be isolated and their differentiation ability will be tested. Defining the control of differentiation will allow for the understanding of the mechanisms that direct mesenchymal stem cells down the osteoprogenitor lineage. Completion of the proposed studies will provide a better understanding of the identity and the phenotype of the mesenchymal progenitor cells as well as provide information on their active role in bone healing during injury and bone fractures.